New Start Nigeria

Advocacy International was engaged by the government of Nigeria to consult on the design and implementation of an ambitious debt-reduction campaign.

Background

In 2000, Nigeria’s average debt service due to the Paris Club each year was $2.4 billion. But as the government prioritised spending on vital services, it could only afford to pay on average $1.2 billion. Arrears kept rising with penalties added.

In the absence of any framework of justice for the resolution of international debt crises, the Nigerian government could only rely on the goodwill of powerful creditors. President Obasanjo and his formidable Finance Minister, Mrs Ngozi Okonjo-Iweala, then began a sustained campaign to persuade creditors to write off Nigeria’s debts. By this time the debt had become a major political issue inside Nigeria.

Outcomes:

Clearance of $30 billion of debt owed to foreign creditors, saving Nigeria almost $47 billion over the next 15 years.

Finance Minister Mrs Ngozi Okonjo-Iweala and Director of the Debt Management Office, Dr. Mansur Muhtar, ready to deliver an opening statement to OECD creditors, at the start of an exhausting 48 hour non-stop negotiation.
The meeting took place at the Paris Club of OECD Creditors, based at the French Treasury, Paris.

Donald Uduehi, advisor to Dr Muhtar and Mrs Okonjo-Iweala.

The entrance to the Paris Club, in the heart of the French Treasury in Paris

Donald Uduehi, advisor to Dr Muhtar and Mrs Okonjo-Iweala.

The Campaign

In 2003 the government of Nigeria embarked on an ‘inside track’ strategy to persuade world leaders to agree to substantial debt cancellation. However there was still resistance from key creditors. Nigeria’s then Finance Minister, Mrs Okonjo-Iweala , working closely with Dr. Mansur Muhtar of the Debt Management Office recognised the need for urgent action: a public advocacy campaign in OECD countries.

Advocacy International was employed to design and implement the campaign.

The brief was challenging: to communicate to creditors and the public in Europe, the United States and Japan that Nigeria’s new government had made a fresh start. However the ‘overhang of debt’ hindered the government’s attempts to stabilise and reform the economy, to tackle poverty and end corruption. An honourable agreement between debtor and creditors was needed if Nigeria’s fresh start was to make a positive impact on the country’s economy.

Advocacy International held extensive briefing sessions with Nigeria’s foremost economists and experts. Our team began the hard work of ‘cutting the diamond’ – analysing and communicating Nigeria’s case to a sceptical public in Europe, the US and Japan, based on credible evidence.

We branded the campaign “New Start Nigeria”. We called on creditors to acknowledge the reforms and changes already implemented by President Obasanjo’s team using a slogan that played on the issue of debt: “Credit where credit’s due”.

Ai oversaw the design and build of a modern, up-to-date website that reflected the changes taking place in Nigeria and showcased the country’s achievements. The site provided extensive briefings and news on the economy, reforms and the debt, and acted as a mobilisation point for Nigeria’s supporters.

We contacted key stakeholders – the many groups representing Nigerians living in the diaspora. We invited them to become ‘messengers’ for the campaign. Ai enlisted the support and third party endorsement of high-profile dignitaries and celebrities, including Nigerian football players based at European clubs.

“Your extensive advocacy has in no small way helped in securing the debt package which we received from the Paris Club (of creditors). This package will help guarantee the future of millions of lives in Nigeria. No words can really express how grateful we are for your extraordinary commitment.”

Mrs Okonjo-Iweala, then Finance Minister of Nigeria, now Managing Director of the World Bank.

Working closely with the Nigerian Finance Minister Ai staff set out to brief and update journalists, and set up a series of interviews with influential opinion-formers in the European and US media. Mrs Okonjo-Iweala was interviewed on the BBC’s globally respected “Hard Talk”, and by the Economist, the Financial Times and Daily Mail. Each encounter resulted in positive coverage, including an extraordinary double page spread in the Daily Mail. This then encouraged further coverage.

We then suggested that a group of Nigerian Parliamentarians visit Europe, the US and Japan to augment the campaign. Accompanying the parliamentarians on the trans-continental trip, and working closely with Nigeria’s diplomatic representatives, the Ai team arranged meetings with the media, key officials, politicians and civil society groups across Britain, France, Italy, Germany and Japan. Ai ensured that a range of voices put Nigeria’s case to official, media and NGO audiences in creditor countries.

On 11th June, 2005, the UK’s Chancellor, Gordon Brown, announced that G8 finance ministers had agreed a massive, and unprecedented debt deal for Nigeria. Later in the year, at the Paris Club in October, 2005, creditors finally cleared $30 billion of debt Nigeria owed to foreign creditors. The deal will save Nigeria almost $47 billion in debt service payments over the next 15 years.

Towards the end of the negotiations Nigerian Senators and Congressmen flew in from Abuja to join the delegation, monitor progress and report back to President Obasanjo. This transparency and accountability of the negotiating team to elected representatives set a precedent for negotiations that are normally secretive. Here the Hon Farouk Lawan, Senator Udo Udoma and Mrs Okonjo-Iweala listen attentively to Mr Moulin, then secretary of the Paris Club as he reports on the latest offer from OECD creditors.

Related articles:

March 17 2005

Not only is the government starting to spend within its means; the reformers are also trying to ensure that public funds are spent more transparently. The International Monetary Fund (IMF) describes Nigeria’s recent record as “commendable”.

By David White

By giving a high profile to the campaign, President Olusegun Obasanjo and his team have brought a patriotic dimension to their reform strategy, showing themselves as fighting for national interests on an international stage.

By Lydia Polgreen

Nigeria reached an agreement last October with the Paris Club of creditors, which includes Germany, France, Britain and other wealthy nations, that allowed Nigeria to pay off about $30 billion in accumulated debt for about $12 billion — an overall discount of about 60 percent.

By Larry Elliott and Patrick Wintour

Rich western countries yesterday announced the biggest single debt relief in Africa’s history when they unveiled a plan that will eradicate $31 bn (£17.3 bn) of debts owed by Nigeria within six months.After last-minute lobbying by Britain overcame resistance by small creditor countries, the Paris Club accepted a three-stage deal that will allow Nigeria to hire 120,000 new teachers and put an extra 3.5 million children into school.

By Professor Thomas M. Callaghy

It is easy to be cynical about Nigeria, often with very good reason, but, as we shall see, not always. This paper is about a period when things started to go right in Nigeria. It took a while to really gather momentum, but that it did so at all is a stunning achievement.